Minority-owned businesses grew more than four times as fast as U.S. firms overall between 1992 and 1997, increasing from 2.1 million to about 2.8 million firms, according to a report released today [PDF] by the Commerce Department's Census Bureau.
The 30 percent growth rate exceeded the 7 percent increase for all U.S. firms, which jumped from 17.3 million in 1992 to 18.4 million in 1997.
Receipts of all minority-owned firms (excluding C corporations) rose 60 percent to $335.3 billion in 1997, compared with a 40 percent increase for all U.S. firms over the same period.
In releasing the report, Under Secretary for Economic Affairs Kathleen B. Cooper said, "We are pleased to report that this portrait of the American economy shows rapidly expanding opportunities for minority entrepreneurs and a more diverse universe of small businesses."
Ronald N. Langston, director of the Commerce Department's Minority Business Development Agency (MBDA), said, "Today's report clearly indicates minority businesses are growing at a faster rate than U.S. businesses overall." He further said, "As the director of MBDA, I will work to empower minority businesses to achieve higher levels of success by directing MBDA to be innovative and focused on entrepreneurship."
The growth estimates do not include C corporations, for which comparable 1992 data are not available. C corporations were covered for the first time in the report, 1997 Survey of Minority-Owned Business Enterprises: Summary. C corporations encompass all legally incorporated businesses, except for subchapter S corporations. Subchapter S corporations are those whose shareholders elect to be taxed as individuals rather than as corporations.
Forty-three percent ($255.9 billion) of all revenues generated by minority-owned businesses were produced by 252,900 C corporations.
Including C corporations, there were more than 3 million minority-owned business enterprises, employing 4.5 million people and generating $591.3 billion in revenues. Overall, minority-owned firms made up 15 percent of the nation's businesses and generated 3 percent of all receipts.
Minority-owned businesses are those owned by African Americans, Hispanics, Asians and Pacific Islanders, or American Indians and Alaska Natives.
The vast majority of these firms, 82 percent or 2.5 million, were sole proprietorships (unincorporated businesses owned by individuals).
Highlights from the report:
California, Texas, New York and Florida, the nation's most populous states and home to nearly half of all minority residents, had the largest number of minority-owned businesses.
While Hispanics owned the largest share of firms owned by minorities, Asian- and Pacific Islander-owned firms reaped the largest share of minority-owned business revenues -- 52 percent.
Men were owners of about 55 percent of the firms owned by each of the four minority groups. African Americans had the largest percentage of firms owned by women -- 38 percent.
Thirty-nine percent of all minority-owned firms had 1997 receipts of under $10,000; about 3 percent had sales of $1 million or more.
Average receipts per firm were $194,600 compared with $410,600 for all U.S. firms, excluding publicly held corporations and firms (such as mutual companies) whose owners' race or ethnicity could not be determined.
About 1 in 5 of all minority-owned firms had paid employees. More than 4,400 minority-owned firms had 100 or more employees.
Fifty-nine percent of all minority-owned firms were in the services and retail trade industries, accounting for 43 percent of all receipts.